PRESENTER: Presenter
Jeff Jewell, Economic and Community Development Director
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SUBJECT: Title
Presentation and discussion of a proposed airport loan forgiveness
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DEPARTMENT: Economic & Community Development
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COUNCIL DISTRICTS IMPACTED: All
BACKGROUND INFORMATION:
All airports play a variety of different functional roles and contribute at varying levels to meet the transportation and economic needs on a national, state and local level. New Braunfels National Airport - designated a national airport in 2021 - has long been identified as an asset for the city. In addition to serving the need to connect New Braunfels to the rest of the country through the airspace system, the airport has become an integral part of the local community and economy.
Airport operations and activities include business aviation, law enforcement, military, medical care, emergency services, agricultural, scientific, and humanitarian missions. Every year, air visitors in New Braunfels via general aviation, reinforcing the airport’s role as a critical gateway. As a result, the City and its various stakeholders have consistently recognized the need to support the airport’s continued growth and evolution as it assumes a larger role in the national airspace system and the regional economy.
In 2019 the city adopted an airport master plan to guide long-term infrastructure and facility investments, positioning the airport as a premier corporate and business aviation center in the San Antonio-Austin corridor. The plan identified both existing and future infrastructure and facility needs, driven by growth in aviation activity and the regional economy. One key indicator of this activity is operations - defined as a takeoff or landing - which reflect the pace of use at the airport:
Activity at the airport has grown since the Master Plan’s 2019 adoption. Another important indicator - fuel sales, measured in gallons- has also risen significantly in recent years:
While increased activity has driven revenue growth, it has also resulted in corresponding increases in expenditures:
Investments in airport infrastructure enhance airfield readiness and strengthen the airport’s role as a local and regional economic catalyst. Guided by a comprehensive master plan, the New Braunfels National Airport has aligned its development efforts with a vision for capacity, safety, and regional growth. Many of the infrastructure and facility projects identified in the master plan - a new air traffic control tower, terminal and Fixed Base Operation facility, new corporate taxiways and aprons, hangar facilities and stormwater and drainage infrastructure construction - have advanced through feasibility, planning, and design phases.
Recognizing the importance of infrastructure investment in supporting future growth, the NBEDC has historically supported key infrastructure projects. In 2015, NBEDC provided a $2,400,000 grant/loan in 2015 to extend a taxiway to enable future hangar developments. Since that time, private development has constructed two hangars along the extended section. These additional hangars and capacity have added operations, activity, fuel sales and corresponding revenue increases, which have been important to airport success.
At the time the agreement was structured, half of the funds were issued to the Airport in the form of a grant, while the other $1,200,000 was provided as a ten-year amortizing loan with a 3% interest rate. The Airport makes $129,000 repayments and has done so for the past five years. The remaining balance of the loan is approximately $644,770.
The New Braunfels National Airport is an enterprise fund, meaning that it does not receive general property or sales tax revenue support. Instead, it relies on revenues generated at the airport through the leasing of land, publicly owned hangars, and the provision of goods and services. However, the scale of ongoing capital infrastructure and facility needs- required to meet growing demand and maintain existing assets- continues to outpace available funding. Forgiveness of the remaining loan would free up approximately $129,000 in airport revenues, allowing those funds to be reinvested into operations and priority infrastructure projects that support airport’s continued growth and economic impact.
ISSUE:
The NBEDC Strategic Plan identifies Business Recruitment and Retention as one of its four priorities. Continued airport maintenance and expansion to meet projected growth demands from general and corporate aviation will enhance New Braunfels’ position and competitiveness to attract and retain high quality companies. This proposed project would reduce annual airport expenses by $129,000, allowing the airport to reinvest those proceeds into new projects and capacity expansion that can meet the future demand for services by the general and business aviation community.
STRATEGIC PLAN REFERENCE:
☒Economic Mobility ☐Enhanced Connectivity ☐Community Identity
☐Organizational Excellence ☐Community Well-Being ☐N/A
FISCAL IMPACT:
This is a presentation and requires no action. Any future action for this project would require a public hearing notice.